Is Energy East a bad deal for Canadians?

Posted by Michael Lucifora, Summer Student on June 8, 2017

In 2014, TransCanada proposed the Energy East pipeline project. If built, the pipeline would stretch 4,600 km across Canada, connecting the Western tar sands to an export terminal in Eastern Canada. Energy East is the largest tar sands pipeline ever proposed with a functional capacity of over one million barrels per day. The project involves both the construction of new pipe and the converting of existing natural gas pipe into a crude oil transporter.

The proposed pipeline project has not gone unnoticed by Canadian environmental non-governmental organizations (ENGOs) like Environmental Defence (ED). ED has published reports commenting on the proposed pipeline’s environmental effects and the rationale behind the pipeline, whose oil is destined for export.(1) CELA is acting for ED in the Energy East proceedings before the National Energy Board (NEB).

The ecological impact and viability of the project has not been the only topic of controversy. As a result of concerns about real or perceived bias, and controversy undermining the perception of impartiality of the Energy East review panel, all three panel members recused themselves, adjourning further review hearings until new membership was established.

In January of 2017, three new members were appointed by the NEB to undertake a review of the Energy East project. The new panel immediately voided all decisions made by the previous panel – entirely restarting the review process.

Since the original application by TransCanada was submitted in 2014, political and public opinion on carbon emissions has shifted significantly. Most notably, Canada has ratified the Paris Climate Agreement and created a national climate framework to reduce emissions, including but not limited to a coal phase out, carbon pricing, and clean fuel standard.

In light of other recent pipeline approvals, any further pipeline authorizations would severely challenge Canada’s dedication to reducing harmful emissions. Moreover, oil supply forecasts conducted by the International Energy Agency have predicted that global demand for oil will significantly decrease in the next twenty years as climate policies become increasingly restrictive. This means that construction of all four proposed oil projects currently approved and proposed (Keystone XL, Trans Mountain, Enbridge Line 3, and Energy East) would result in nearly three million barrels per day of excess capacity.

One of the first decisions made by the new NEB panel was a call for Canadians to submit considerations that were not already identified in the draft list of issues. In response, CELA and Environmental Defence made a joint submission.

The final list will be comprised of factors to be considered by the Energy East panel in deciding whether to recommend the construction of the pipeline. The draft list currently contains topics such as previous environmental commitments, environmental and socioeconomic impacts of the pipeline, and, for what may be the first time in an NEB review, upstream and downstream greenhouse gas emissions.

The Energy East panel has since closed the submission process (May 31, 2017) in order to finalize the list, however, this does not mean that Canadians have missed their opportunity to effect change. The NEB has created a short online survey asking the public for opinions regarding the shaping of the Energy East hearing process.

While the Energy East review continues, the NEB itself is also undergoing significant change.

A report was completed by the Expert Panel on the Modernization of the National Energy Board in response to repeated submissions from Canadians. The report emphasizes that the NEB is outdated and not trusted by the Canadian population. Until the modernization of the NEB is complete, CELA and ED have called for the Energy East review to be put on hold.

In response to the NEB’s expert panel report, “Forward, Together – Enabling Canada’s Clean, Safe and Secure Energy Future,” the Government of Canada is welcoming comments through a consultation portal until June 14. CELA encourages everyone to submit their comments on the report to the NEB expert panel by June 14.

The modernization of the NEB is an ongoing concern for CELA. Subsequent blog posts on this topic can be found here in the coming weeks.